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TMI Blog2018 (6) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the declaration forms are filed by the assessee, the liability of the assessee to deduct tax on the payments made to the sub-contractor would not arise - thus we have taken a consistent view that non production of Form 15G/15H would not lead to disallowance U/s 40(a)(ia) - Also see CHITTOOR DIST. CO-OPERATIVE CENTRAL BANK LTD. [2016 (7) TMI 338 - ITAT HYDERABAD] - Decided in favor of assessee. - ITA No. 324/JP/2018 - - - Dated:- 4-6-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P.C. Parwal (C.A.) For The Revenue : Shri Anoop Singh (Addl.CIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order of dated 22.12.2017 of CIT (A), Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below that the payment of interest to these persons did not require deduction of tax as the income of the recipient was below taxable limit. In support of this explanation the assessee filed copies of Form 15G/15H of all as well as copy of ITR/certificate of two parties. The ld AR has further contended that when the assessee has already taken the declaration from the recipient that their income is below taxable limit and taken Form 15G/15H then non submissions of these forms to the Chief Commissioner/ Commissioner cannot be a ground for disallowance U/s 40(a)(ia) of the Act. There is separate action provided U/s 272A(2)(f) of the Act for non submission of Form 15G/15H to Chief Commissioner/Commissioner. The ld. AR has relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prescribed U/s 191A(2) of the act. The AO disallowed the said claim of interest of ₹ 8,46,733/- by invoking the provisions of Section 40(a)(ia) of the Act and rejecting the explanation of the assessee that the assessee has already obtained the declaration in Form 15G/15H from these parties. There is no quarrel on the point that as per the provisions of Section 197A(2) of the Act the assessee is also required to submit Form 15G/15H to the office of Chief Commissioner/Commissioner within the prescribed period and as per Rule 29C of the Income Tax rules. However, the failure of the assessee to comply with the conditions as required U/s 197A(2) would attract the provisions of Section 272A(2)(f) and therefore, the penalty can be imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paras 4 and 5 as under:- 4. The combined reading of these two provisions make it clear that if there is any breach of requirements of Section 194C(3), the question of applicability of Section 40(a)(ia) arises. The exclusion provided in Sub-section of Section 194C from the liability to deduct tax at source under sub-section (2) would be complete, the moment the requirements contained therein are satisfied. Once, the declaration forms are filed by the subcontractor, the liability of the assessee to deduct tax on the payments made to the sub-contractor would not arise. As we have examined, the sub-contractors have filed Form No. 15-I before the assessee. Such being the case, the assessee is not required to deduct tax under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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